When we look at the weekly Crude Oil Inventory report chart it becomes readily apparent that inventories have been dropping steadily and regularly since April of 2017. This draw down serves the purposes of the oil producers as their profit per barrel grows. OPEC has placed production restrictions on its member states and non-member states have played along with the scheme to restrict output and bring down the overall inventory levels for this crucial commodity. However, despite the reductions in inventory levels in the US, there is still a surfeit of oil. As of last week there was over 1.224 million bbl held above ground. The long term average inventory hovers close to a million. That’s a 25% excess level of product. Couple this with the fact that as price remains high, say above the $50 level, US shale producers continue to enter the production pipeline, making it less likely that inventories will reduce. SO…we are of the opinion that Oil is an excellent short term buying opportunity but that the long term prospects are determinedly bearish.